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Openwave Goes On Shopping Spree

Open IP-based communication infrastructure software maker Openwave Systems Wednesday said it will spend an estimated $77 million to acquire the technology of two separate companies.

The Redwood City, Calif.-based company said it will drop $2.26 per share in cash (estimated at $59 million) for Boulder, Colo.-based SignalSoft Corp. . SignalSoft said it will use about $45 million of its existing cash to help finance the transaction. The deal is expected to resolve by October 1 2002.

Openwave also said it has paid $17.5 million in stock and cash for Ellipsus Systems, a privately owned company based in San Francisco.

The goal, say execs, is to meld SignalSoft's Wireless Location Services software suite and commercial and emergency (E911) location-based services along with Ellipsus' Java download management solution into Openwave's various platforms.

"The combination of SignalSoft's technology with Openwave's leadership in mobile and messaging software and strong customer base will provide the broadest industry solution to accelerate communication service providers' transition to voice and data oriented revenue streams." said Openwave chairman, president and CEO Don Listwin.

"We are very excited about the opportunity to contribute to the Openwave success story," said Ellipsus CTO and co-founder Rikard Kjellberg. "Ellipsus' Java download technology is a natural extension of Openwave's leading mobile offering. Operators will now be able to efficiently manage the relationship with third party content suppliers, the quality assurance process and delivery of content to mobile consumers."

As separate companies, SignalSoft and Openwave already serve most of the mobile operators out there. SignalSoft's customers include AT&T Wireless, Cingular, Sprint PCS and VoiceStream, and leading operators in Europe, such as Cegetel/SFR, Libertel-Vodafone, Orange and Telia. Openwave also has contracts with some 85 mobile communication service providers.

The acquisition is expected to boost Openwave's position to capture demand for location-based services, considering that the company says SignalSoft has more location-based services deployed worldwide than any other software infrastructure vendor.

A February 2002 "Wireless Internet Business Models" report from Ovum predicts there will be 385 million location-based users worldwide by the year 2006, generating nearly $11 billion in location related revenues (includes transaction value of goods associated with m-commerce and spending related to location based advertising). Of this, $4 billion is expected to accrue to operators for information, location tracking, call routing, m-commerce and advertising services.

As a part of the Ellipsus acquisition, Openwave said it plans on enhancing its own download management software capabilities to include Java application downloads. Ellipsus builds and markets infrastructure software for deploying and managing applications on mobile devices including games and multimedia content.

Ellipsus' early advances in developing technology for J2ME (Java 2 Platform Micro Edition) MIDlet delivery led Sun Microsystems to select Ellipsus as the reference implementation of the Java Vending Machine. Sun has implemented Ellipsus' solutions in demo centers in Menlo Park, California, and Stockholm, Sweden. Openwave and Ellipsus have demonstrated their expertise in media downloads through participation in standards bodies including the Java Community Process (JCP), WAP Forum, and 3GPP.

"We believe that Java is a key enabler of rich application services that will drive mobile data services going forward," said Openwave Product Management vice president Michel Quazza. "With over 200 million Java capable handsets expected to hit the worldwide market by 2003, we're committed to ensuring that operators and content developers are poised to deliver the best user experience possible."